Market Economy Requires Wise Government Intervention

In China where there is a profound influence of "local magistrates as citizens’ parents" in the traditional sense, people are naturally inclined to rely on government authorities

VoIP Market Intensified,the Government Control Still Won't Be Unlocked In the Near Future

The traditional telecommunications operator of China has entered into a substantive network construction stage of NGN and new VoIP service in 2006. As the increasing understanding and the consideration of cost to VoIP, VoIP has become more acceptable for CIO of large-scale enterprises. Small and medium-scale enterprises are sensitive to communication cost, but influenced by the maturity of VoIP technology and reduction of VoIP equipment price, the market is intensified. All these drive the VoIP equipment entering into the actual purchase stage and promote the stable growth of VoIP equipment scale.

From Government to Enterprises： How Tax Sharing Interacts with Tax Rates

Tax sharing embodies central-local government fiscal relations and tax rates reflect government-market relations.Research on the interactions between tax sharing and tax rates helps uncover the effects of central-local fiscal relations on government-market relations.According to our study,China's flexible tax sharing and differential tax rates facing firms are two important typical facts;theoretical analysis discovered that effective corporate tax rates are influenced by local government preferences and tax sharing ratio;empirical analysis found that increasing CIT and VAT sharing ratios for governments at city and county levels led to the reduction of tax evasion and increase of effective tax rates.The above conclusions have revealed the unique mechanism of how government-market relations are influenced by fiscal system,explains the sources of differential tax rates facing Chinese firms,and provides reference for next-step fiscal reform.

Distortions, Growth Catch-up, and Sustainable Growth

A distortion is a departure from the allocation of economic resources from the state in which each agent maximizes his/her own welfare. Distortions can be divided into endogenous distortion(i.e. market imperfections) and policy-imposed distortion. The relationship between distortion and development is complex, thus favorable distortion would only be possible under certain conditions, where, as argued in this paper, four crucial mechanisms may play roles — advantage of backwardness, second-best principle, coordination failure and political economy perspective. Empirically, both international experience and evidence from China suggest that distortions have a positive effect on total factor productivity(TFP) in the early stages of development, but with increasing income levels this role gradually diminishes. Especially in the phases of middle and high income, the negative effects of distortions are significant and become an important factor leading to the middle-income trap. Therefore, reducing and correcting distortions is the key to achieving sustainable growth. Regarding China, it is necessary to eliminate the distortions in a clear way and let the market play the decisive role in resource allocation. Otherwise, in the name of "growth catch-up," the policy-imposed distortion will occur frequently, and the direction of market-oriented reform will become blurred and swing. Mitigating unfavorable distortions is largely a process of exploring the favorable borderline of government and market, which constitutes a major challenge for all economies.

中国电子产业:发展原因和制约因素(英文)

The development of China’s electronics industry can be attributed to supportive governmentpolicies, strong domestic market demand and the opportunities provided by the internationaltransfer of technology in the electronic manufacturing sector. China’s enterprises can onlycontinue to develop through technological upgrading due to the lack of core technologiesof their own. Since this process is still ongoing, China has not become a competitive countryin the field of electronic technology. As a country in transition, government initiatives designedto encourage the development of the electronics industry have also undergone changes inline with economic institutional reform. Direct government intervention policies have beengradually replaced by indirect regulatory policies and the market is playing a more andmore important role in the electronics industry.

Transforming Central Bank Liabilities into Government Debt： The Case of China

Where policy has substantially increased central bank assets, the corresponding liabilities present an opportunity to increase the breadth, depth and liquidity of the government bond market. In China＇s case, transformed illiquid central bank liabilities couM double or triple the stock of government bonds. Central bank liabilities can be transformed into government bonds either through the government ＂s purchase of foreign exchange reserves held by the central bank or by the government overfunding its borrowing requirement and depositing the proceeds in the central bank. The overfunding approach is preferred if, for financial stability reasons, it is judged prudent to leave the central bank with sufficient resources to serve itself as lender of last resort in foreign currency to the banking system. In the case of China, public debt consolidation could also contribute to further liberalizing the Chinese banking system, wider international use of the renminbi and more balanced holdings of key currency government bonds.